Ofgem, the regulator for domestic gas and electricity markets, are consulting on proposals to improve outcomes for prepayment meter consumers who self-disconnect (not topping-up their meter) and/or self-ration energy (limiting energy use).
In 2018, Ofgem’s Consumer Engagement Survey identified that 1 in 10 prepayment consumers had self-disconnected in the last year. This equates to 350,000 gas and 450,000 electricity customers. End Fuel Poverty Coalition member, Citizens Advice, have previously reported that 16% of prepayment meter customer report running out of credit annually, with 50% citing keeping their meter topped up as being a significant daily concern. 72% of prepayment customers who self-disconnect are vulnerable to cold homes (i.e. households containing children or someone with a health condition).
Ofgem aims to reduce the proportion of customers who engage in self-disconnection and self-rationing practices and in so doing, reduce the detriment caused. The consultation includes the following proposals:
- Introducing a requirement on suppliers to identify consumers and provide support to those self-disconnecting and self-rationing.
- Formalising emergency, friendly and discretionary credit offered by suppliers to those in temporary crisis situations.
- Incorporating the Ability to Pay principles (requiring suppliers to consider a customer’s ability to pay when setting debt repayment rates) into the supply licence condition.